Question
Alladin Inc., expects its EBIT to be $422,505 every year forever. The firm can borrow at 2.5 percent. The company currently has no debt, its
Alladin Inc., expects its EBIT to be $422,505 every year forever. The firm can borrow at 2.5 percent. The company currently has no debt, its cost of equity is 11.5 percent, and the tax rate is 26 percent. The company borrows $443,303 and uses the proceeds to repurchase shares. What is the WACC after the recapitalization?
[Enter the final answer in as a percent with two decimals (e.g. 5.55%)]
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Intermediate Financial Management
Authors: Brigham, Daves
10th Edition
978-1439051764, 1111783659, 9780324594690, 1439051763, 9781111783655, 324594690, 978-1111021573
